New Supreme Court Term Promises a Range of Labor and Employment Cases

The U.S. Supreme Court opens its 2012-2013 term today. Although the Court may not decide as many landmark labor and employment decisions as it has in recent terms—such as those we witnessed regarding President Obama’s Affordable Care Actin N.F.I.B. v. Sebelius (2012) orclass certification in Dukes v. Wal-Mart (2011)—it is likely to hear a number of cases with significant implications for employers. The Court has already selected several key labor and employment cases to hear this term, including the following:

Vance v. Ball State Univ.: The issue in this case is whether an employee who oversees and directs other employees’ daily tasks, but lacks authority to hire, fire, demote, promote, transfer, or discipline them, is a “supervisor” as defined in Title VII of the Civil Rights Act of 1964. The courts of appeal are split on how expansive the definition is. The federal government contends that a supervisor should be defined simply as one who directs an employee’s activities. Since an employer is strictly liable for severe or pervasive harassment by a supervisor, but is only liable for actions of a coworker when it is negligent, the manner in which the Supreme Court defines “supervisor” will have important implications for employers under Title VII, and likely other employment statutes that similarly define a supervisor.

Genesis Health Care Corp.v. Symczyk: In this case, the Court will consider whether a Fair Labor Standards Act (FLSA) collective action becomes moot when the lone plaintiff receives an offer of judgment from the employer that fully satisfies her FLSA claim. The U.S. Court of Appeals for the Third Circuit held that the offer of judgment did not moot the plaintiff’s claim, expressing a concern that a contrary ruling would enable employers to avoid FLSA collective action claims by simply “picking off’ individual named plaintiffs. This case will affect the viability of such strategies to defuse a putative collective action in the early stages of litigation.

U.S. Airways, Inc. v. McCutcheon: This case involves § 502(a)(3) of the Employee Retirement Income Security Act (ERISA), which provides for “appropriate” equitable relief for a health benefits plan administrator that is entitled to reimbursement for medical expenses pursuant to an ERISA-governed plan. At issue is whether equitable defenses and principles, such as unjust enrichment, may be applied to limit a benefit plan’s recovery in spite of plan language entitling the benefit plan to reimbursement. In deciding that equitable defenses and principles could be applied, the U.S. Court of Appeals for the Third Circuit broke with other courts of appeal that have considered the issue.

Comcast Corp. v. Behrend: Although this is an antitrust case, its implications for class-action employment cases may be significant. In the 2011 Wal-Mart decision, the Court emphasized that district courts must conduct a “rigorous analysis” to ensure that plaintiffs can meet the requirements for class certification. This analysis includes engaging in a “merits analysis” bearing on the question of class certification, even if the plaintiffs will be required to prove these issues again at trial. Thus, in Comcast Corp., the Court will consider whether a federal trial court can certify a class action without first determining whether the putative class has introduced sufficient evidence to establish that resolution of the litigation is amenable to class-wide damages.

The Court will no doubt agree to hear additional labor and employment cases over the coming months. Some requests for review pending before the Court include cases involving the Family and Medical Leave Act, freedom of speech for union employees, retaliation under the Sarbanes-Oxley Act, and preemption under ERISA. Franczek Radelet will continue to monitor and report on important Supreme Court developments.